New products and fructifying projects means that Tulip Group, Verna, is performing robustly in 2014-15 with financials expected to maintain momentum in the year ahead, reports Shoma Patnaik
Among Goa-based pharmaceutical companies, Tulip Group is in fine shape. It is one of India’s leading manufacturers of diagnostics with a reputation of constantly evolving and coming out with new products. The Group is growing at a fast clip and currently ranks among the top ten producers of in-vitro diagnostics in the market.
Tulip’s latest product expected to ramp up performance is a new tool for testing infectious diseases. It is automated and near-the-patient diagnostic equipment that gives sample results in less than an hour. Marketed under the brand name ‘True Lab’ it is in partnership with a Bangalore-based company.
The new product is affordable, user-friendly and deliverable to end users. Production is ongoing and it is already launched in the market. It was in testing stage for about one-and-half years and is now ready for users. It promises to contribute significantly to turnover from 2015-16 onwards.
Meantime, current year (2014-15) outlook is cheery with turnover anticipated in the range of Rs 300 crore. In the previous year viz 2013-14, the total turnover was Rs 260 crore and profit margin in range of 18 per cent.
Established in 1998, Tulip was founded by three professionals who are equal partners in the business. Ownership is divided between promoter-directors, Dr V K Naik, Deepak Tripathi and N Sriram. The group comprises nine companies which manufacture about 400 different types of diagnostic products for equally vast applications. Diagnostics are basically reagent kits used in testing blood, coagulation, infections, hematology, rheumatology, bio-chemistry, micro-biology, etc.
Tulip, says Sriram, director, has come up solely through in-house R&D. The group has zero borrowings and is funded all expansions and projects through internal accruals. Further, despite being a major player in its product segment the promoters have not thought of going in for a public listing and are happy existing as a privately held company. The group, he adds, meets its capital needs internally with ease and therefore public listing is quite unnecessary for the moment.
Explaining Tulip’s future prospects, Sriram says that it is tied to overall outlook for the pharmaceutical industry which is optimistic. The medical business is growing on the back of improved awareness and middle income group’s willingness to spend more on healthcare. Therefore, the entire chain of healthiness such as manufacturers, doctors, hospitals, diagnostic labs and diagnostic testing tools are collectively growing.
Moreover, penetration of medicine is still low in India with only 50 per cent of the population covered under healthcare. It means that the upside to growth is sizeable and existing players are assured of growing market, says Sriram. The group, he adds, also exports and global sales are to 70 countries as well as international agencies such as WHO, UNICEF, etc. Exports in 2013-14 comprised 42 per cent of total sales.
As for competition, Sriram says that Tulip is pretty solid in market presence and does not fear peer companies whether they are MNC or Indian. However, cheap imports from Korea and China are a real threat to all players in the industry as everyone is uniformly affected by it. The group, he continues, is fully Goa-based with a corporate office in Bambolim and factory in Verna. About 80 per cent of the production is from Verna while the balance 20 per cent is from the second manufacturing facility at Rudrapur, Uttarakhand.
Sales are to diagnostic labs as well as industrial customers. Distribution is through marketing offices in major cities, and towns of India and through a large network of sales representatives.
In the future, says Sriram, the promoters definitely have plans to expand further in order to increase production. Thus, they are looking out is for more land in Verna or in other industrial estates. Goa, he adds, will continue to remain the hub of production.